Study of the Effect of Ability and Motivation Factors on the Failure of Small and Medium-Sized Businesses in Iran

Abstract The effect of small and medium-sized enterprises through entrepreneurship, revenue growth and creation of employment opportunities on the global economy is undeniable. Although these enterprises enjoy some strength like flexibility and compatibility in comparison to larger enterprises, they face a lot of problems which have kept their failure rate high. Therefore, in order to have proper and principled policy and plan to achieve economic development it is important to identify the factors affecting the failure of small businesses.This study aims to investigate the effect of two individual factors of ability and motivation on the failure of small and medium-sized businesses by studying 30 unsuccessful companies located in Industrial towns of Guilan province by presenting a questionnaire among managers and employees. In this paper, SPSS16 software was used for data analysis and to access the answers of the research questions. According to the results, the impact of sanctions and inflation on motivation was considered as the most significant motivational factor and lack of resources management and being considerate of other’s abilities were regarded as the most important ability factors.